Development and early constraints VOD services first appeared in the early 1990s. Until then, it was not thought possible that a
television programme could be squeezed into the limited telecommunication bandwidth of a copper telephone cable to provide a VOD service of acceptable quality as the required bandwidth of a
digital television signal is around 200
Mbps, which is 2,000 times greater than the bandwidth of a speech signal over a copper telephone wire. VOD services were only made possible as a result of two major technological developments:
MPEG (
motion-compensated DCT)
video compression and
asymmetric digital subscriber line (ADSL) data transmission. were interpreted as conducive to eventual VOD deployment. Other early VOD systems used tapes as the real-time source of video streams.
GTE started as a trial in 1990, with
AT&T providing all components. By 1992, VOD servers were supplying previously encoded digital video from disks and
DRAM. In November 1992, Bell Atlantic announced a VOD trial. IBM was developing a video server code-named Tiger Shark. Concurrently,
Digital Equipment Corporation (DEC) was developing a scalable video server configured from small-to-large for a range of video streams. Bell Atlantic selected IBM and in April 1993 the system became the first VOD over ADSL to be deployed outside the lab, serving 50 video streams. In June 1993, US West filed for a patent to register a proprietary system consisting of the
Digital Equipment Corporation Interactive Information Server,
Scientific Atlanta providing the network, and
3DO as the set-top box with video streams and other information to be deployed to 2,500 homes. In 1994–95, US West filed for a patent concerning the provision of VOD in several cities: 330,000 subscribers in Denver, 290,000 in Minneapolis, and 140,000 in Portland. In early 1994,
British Telecommunications (BT) introduced a trial VOD service in the United Kingdom. It used the DCT-based
MPEG-1 and
MPEG-2 video compression standards, along with ADSL technology. In the UK, from September 1994, a VOD service formed a major part of the Cambridge Digital Interactive Television Trial. This provided video and data to 250 homes and several schools connected to the
Cambridge Cable network, later part of NTL, now
Virgin Media. The
MPEG-1 encoded video was streamed over an ATM network from an
ICL media server to
set-top boxes designed by
Acorn Online Media. The trial commenced at a speed of 2 Mbit/s to the home, subsequently increased to 25 Mbit/s. The content was provided by the
BBC and
Anglia Television. Although a technical success, difficulty in sourcing content was a major issue and the project closed in 1996.
United States regulatory and infrastructure developments In the US, the 1982
anti-trust break-up of AT&T resulted in several smaller telephone companies nicknamed
Baby Bells. Following this, the
Cable Communications Policy Act of 1984 prohibited telephone companies from providing video services within their operating regions. In 1993, the National Communication and Information Infrastructure (NII) was proposed and passed by the US House and Senate, opening the way for the seven Baby Bells—
Ameritech,
Bell Atlantic,
BellSouth,
NYNEX,
Pacific Telesis,
Southwestern Bell, and
US West—to implement VOD systems. These companies and others began holding trials to set up systems for supplying video on demand over telephone and cable lines. The
DEC Video and Interactive Information Server architecture used a hierarchy of interactive gateways and gateway proxies to set up video streams and other information for delivery from any of a large number of
VAX servers, enabling it in 1993 to support more than 100,000 streams with full
videocassette recorder (VCR)-like functionality. In 1994, it upgraded to a
DEC Alpha–based computer for its VOD servers, allowing it to support more than a million users. By 1994 the Oracle scalable VOD system used massively parallel processors to support from 500 to 30,000 users. The SGI system supported 4,000 users. The servers connected to networks of increasing size to eventually support video stream delivery to entire cities. In 2001, Enron and
Blockbuster Inc. attempted to create a 20-year deal to stream movies on demand over Enron's fiber-optic network. The heavily promoted deal failed, with Enron's share prices dropping following the announcement. After several trials,
Home Choice followed in 1999 but was restricted to London. After attracting 40,000 customers, they were bought by
Tiscali in 2006 which was, in turn, bought by
Talk Talk in 2009. Cable TV providers
Telewest and
NTL (now Virgin Media) launched their VOD services in the United Kingdom in 2005, competing with the leading traditional pay-TV distributor
BSkyB, which responded by launching
Sky by broadband, later renamed
Sky Anytime on PC. The service went live on 2 January 2006. Sky Anytime on PC uses a legal
peer-to-peer approach based on
Kontiki technology to provide very-high-capacity multi-point downloads of the video content. Instead of the video content all being downloaded from Sky's servers, the content comes from multiple users of the system who have already downloaded the content. Other UK television broadcasters implemented their own versions of the same technology, such as
Channel 4's
4oD (4 on Demand, now known as
All 4) which was launched on 16 November 2006 and the BBC's
iPlayer, which was launched on 25 December 2007. Another example of online video publishers using legal peer-to-peer technology is based on Giraffic technology, which was launched in early 2011, with large online VOD publishers such as US-based VEOH and UK-based Craze's Online Movies Box movie rental service.
System requirements Unlike broadcast television, which traditionally has been the most common in the form of
over-the-air television, VOD systems initially required each user to have an Internet connection with considerable
bandwidth to access each system's content. In 2000, the Fraunhofer Institute IIS developed the
JPEG2000 codec, which enabled the distribution of movies via Digital Cinema Packages. This technology has since expanded its services from feature-film productions to include broadcast television programmes and has led to lower bandwidth requirements for VOD applications.
Disney,
Paramount,
Sony,
Universal and
Warner Bros. subsequently launched the
Digital Cinema Initiative, in 2002. The BBC,
ITV and Channel 4 planned to launch a joint platform provisionally called
Kangaroo in 2008. This was abandoned in 2009 following complaints, which were investigated by the
Competition Commission. In that same year, the assets of the now-defunct Kangaroo project were acquired by
Arqiva, who used the technology to launch the
SeeSaw service in February 2010. A year later, however, SeeSaw was shut down due to a lack of funding. .
Rollout at scale VOD services are now available in all parts of the United States, which has the highest global take-up rate of VOD. In 2010, 80% of American Internet users had watched video online, and 42% of mobile users who downloaded video preferred apps to a normal browser. Streaming VOD systems are available on desktop and mobile platforms from cable providers (in tandem with
cable modem technology). They use the large downstream bandwidth present on their cable systems to deliver movies and television shows to end-users. These viewers can typically pause, fast-forward, and rewind VOD movies due to the low latency and random-access nature of cable technology. The large distribution of a single signal makes streaming VOD impractical for most satellite television systems. Both
EchoStar/
Dish Network and
DirecTV offer VOD programming to
PVR-owning subscribers of their satellite TV service.
In Demand is a cable VOD service that also offers pay-per-view. Once the programs have been downloaded onto a user's PVR, he or she can watch, play, pause, and seek at their convenience. VOD is also common in expensive hotels. According to the
European Audiovisual Observatory, 142 paying VOD services were operational in Europe at the end of 2006. The number increased to 650 by 2009. At the 2010
Consumer Electronics Show in
Las Vegas, Nevada,
Sezmi CEO Buno Pati and president Phil Wiser showed a set-top box with a one-terabyte hard drive that could be used for video-on-demand services previously offered through cable television and broadband. A movie, for example, could be sent out once using a broadcast signal rather than numerous times over cable or fiber-optic lines, and this would not involve the expense of adding many miles of lines. Sezmi planned to lease part of the broadcast spectrum to offer a subscription service that
National Association of Broadcasters President
Gordon H. Smith said would provide a superior picture to that of cable or satellite at a lower cost.
Commercial viability Developing VOD requires extensive negotiations to identify a financial model that would serve both content creators and cable providers while providing desirable content for viewers at an acceptable price point. Key factors identified for determining the economic viability of the VOD model include VOD movie buy-rates and setting Hollywood and cable operator revenue splits. Cable providers offered VOD as part of digital subscription packages, which by 2005 primarily allowed cable subscribers to only access an on-demand version of the content that was already provided in the linear traditional broadcasting distribution. These on-demand packages sometimes include extras and bonus footage in addition to the regular content. == Role of peer-to-peer file sharing ==